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Labor Share Decline and Intellectual Property Products Capital

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  • Dongya Koh
  • Raül Santaeulàlia-Llopis
  • Yu Zheng

Abstract

We study the behavior of the US labor share over the past 65 years. We find that intellectual property products (IPP) capital accounts entirely for the observed decline of the US labor share, which is otherwise secularly constant for traditional capital (i.e., structures and equipment). The decline of the labor share reflects the fact that the US is undergoing a transition to a more IPP capital-intensive economy. This result has essential implications for the US macroeconomic model.

Suggested Citation

  • Dongya Koh & Raül Santaeulàlia-Llopis & Yu Zheng, 2016. "Labor Share Decline and Intellectual Property Products Capital," Working Papers 927, Barcelona Graduate School of Economics.
  • Handle: RePEc:bge:wpaper:927
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    Cited by:

    1. Ricardo J. Caballero & Emmanuel Farhi & Pierre-Olivier Gourinchas, 2017. "Rents, Technical Change, and Risk Premia Accounting for Secular Trends in Interest Rates, Returns on Capital, Earning Yields, and Factor Shares," American Economic Review, American Economic Association, pages 614-620.
    2. Torrini Roberto, 2015. "Labour, Profit and Housing Rent Shares in Italian GDP: Long-Run Trends and Recent Patterns," Politica economica, Società editrice il Mulino, issue 3, pages 275-314.
    3. repec:eee:macchp:v2-3 is not listed on IDEAS
    4. Autor, David & Dorn, David & Katz, Lawrence F. & Patterson, Christina & Van Reenen, John, 2017. "The fall of the Labor share and the rise of superstar firms," LSE Research Online Documents on Economics 83616, London School of Economics and Political Science, LSE Library.
    5. Goren, Amir, 2017. "Inequality and Production Elasticity," MPRA Paper 80316, University Library of Munich, Germany.
    6. Dongya Koh & Raül Santaeulàlia-Llopis, 2017. "Countercyclical Elasticity of Substitution," Working Papers 946, Barcelona Graduate School of Economics.
    7. Jan De Loecker & Jan Eeckhout, 2017. "The Rise of Market Power and the Macroeconomic Implications," NBER Working Papers 23687, National Bureau of Economic Research, Inc.
    8. Nicolas Vincent & Matthias Kehrig, 2017. "Growing Productivity without Growing Wages: The Micro-Level Anatomy of the Aggregate Labor Share Decline," 2017 Meeting Papers 739, Society for Economic Dynamics.
    9. Gene M. Grossman & Elhanan Helpman & Ezra Oberfield & Thomas Sampson, 2017. "The Productivity Slowdown and the Declining Labor Share: A Neoclassical Exploration," NBER Working Papers 23853, National Bureau of Economic Research, Inc.
    10. Caballero, Ricardo & Farhi, Emmanuel & Gourinchas, Pierre-Olivier, 2017. "Rents, Technical Change, and Risk Premia: Accounting for Secular Trends in Interest Rates, Returns to Capital, Earnings Yields, and Factor Shares," CEPR Discussion Papers 11833, C.E.P.R. Discussion Papers.
    11. Chambers, Matthew & Garriga, Carlos & Schlagenhauf, Don E., 2016. "The Postwar Conquest of the Home Ownership Dream," Working Papers 2016-7, Federal Reserve Bank of St. Louis.
    12. Juan Carlos Conesa & Pau S. Pujolas, 2017. "The Canadian Productivity Stagnation, 2002-2014," Department of Economics Working Papers 2017-04, McMaster University, revised Sep 2017.
    13. Jacob Short & Andrew Glover, 2017. "The Age-Distribution of Earnings and the Decline in Labor's Share," 2017 Meeting Papers 1369, Society for Economic Dynamics.
    14. Cantore, Cristiano & Levine, Paul & Pearlman, Joseph & Yang, Bo, 2015. "CES technology and business cycle fluctuations," Journal of Economic Dynamics and Control, Elsevier, vol. 61(C), pages 133-151.
    15. repec:aea:jecper:v:31:y:2017:i:3:p:29-46 is not listed on IDEAS
    16. Dominique Guellec & Caroline Paunov, 2017. "Digital Innovation and the Distribution of Income," NBER Working Papers 23987, National Bureau of Economic Research, Inc.
    17. Nicolas Vincent & Matthias Kehrig, 2017. "Growing Productivity without Growing Wages: The Micro-Level Anatomy of the Aggregate Labor Share Decline," 2017 Meeting Papers 739, Society for Economic Dynamics.
    18. Jones, C.I., 2016. "The Facts of Economic Growth," Handbook of Macroeconomics, Elsevier.

    More about this item

    Keywords

    labor share; intellectual property products; capital; 1999- and 2013-BEA revisions;

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution

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